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TMI Blog1982 (9) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... r with Jonker-Du Croo N. V. of Amsterdam sometime in 1968 for the import of, among other items, links. However, on receipt of the shipment, it was found that the consignment was damaged, was in loose condition and there were a number or shortages as found by the surveyors. A claim was, therefore, lodged by the firm by a letter dated 8-11-1968 with Jonker-Du Croo N. V., that is, the supplier of the equipments, to investigate at their end and find out from the shippers about the shortages and also register their claim for shortages. The business of this firm was taken over by the assessee-company by agreement dated 31-5-1969 whereby for a consideration of Rs. 15 lakh to be paid by allotment of 15,000 fully paid up equity shares of Rs. 100 eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, did not allow the claim of deduction of this amount while working out the income from the business of the assessee, the starting point of which was the net profit as per profit and loss account. 6. When the matter went up in appeal, the Commissioner (Appeals), while upholding the assessee's contention that the provisions of the section 41(1) of the Income-tax Act, 1961 ('the Act') will not be applicable here since the assessee-company was a different assessee from the erstwhile firm in whose case the deduction was allowed, held that this was a receipt arising out of the assessee's business and, in fact, it was only on account of the assessee-company pursuing the matter that the assessee-company was able to recover Rs. 1,05,227. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable. He further pointed out that all the book debts, including actionable claims due to the erstwhile firm together with other assets, were purchased by the assessee-company from the erstwhile firm for a consideration of Rs. 15 lakhs and, therefore, any realisation out of what was purchased by the assessee-company from the erstwhile firm could not be the assessee's income. In this connection, reference was made by him to a ruling of the Supreme Court in the case of CIT v. India Discount Co. Ltd. [1970] 75 ITR 191 where their Lordships laid down that a dealer in shares, who received dividends on shares purchased by him with arrear dividends was not liable to tax on the arrear dividends received on the shares purchased. He, therefore, argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of sub-section (1) of section 41 of the Act cannot be invoked here as rightly held by the Commissioner (Appeals). The issue, therefore, that remains is whether this amount can be assessed as a revenue receipt from the assessee. In the case of India Discount Co. Ltd. which was a dealer in shares and which purchased shares with arrear dividends the Supreme Court held that since the assessee, had contracted not only to purchase the shares but also the arrears of the dividend, this clearly implied that the price paid was not only for the shares but also for the amount which was going to be realised in the form of arrear dividends and, therefore, the arrear dividends received could not be assessed as income. In the present case also, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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